Solution Overview
Core Innovation
LiquitX introduces a novel architecture that aggregates liquidity by risk tier and jurisdiction rather than by individual asset. This approach:
- Concentrates liquidity into fewer, deeper pools
- Segregates risk appropriately by rating bucket
- Eliminates forex exposure through jurisdiction-native stablecoins
- Enables efficient pricing via weighted-pool AMM design
Key Design Principles
Infrastructure, Not Market Maker
LiquitX provides rails for liquidity, not guaranteed prices. The protocol enables price discovery without taking discretionary trading positions.
Risk-Bucketed Pools
Assets are grouped by risk rating (AAA, AA, A, RISKY), allowing liquidity providers to choose their risk exposure while benefiting from diversification within each tier.
| Bucket | Description | LTV | Expected Yield |
|---|---|---|---|
| AAA | Investment grade | 80% | 4-6% |
| AA | High quality | 70% | 6-9% |
| A | Standard grade | 60% | 9-14% |
| RISKY | Speculative | 40% | 14-25%+ |
Real Yield
Protocol revenue derives from actual transaction fees and asset cashflows, not inflationary token incentives.
Modular & Upgradeable
Each component operates independently and can be upgraded via governance without disrupting the entire system.
Architecture Overview
Tranche System
The Senior/Junior tranche structure provides different risk/reward profiles:
| Tranche | Risk Level | Return Profile | Lock Status |
|---|---|---|---|
| Senior | Lower | Fixed yield (e.g., 8% APY) | Unlocked after maturity |
| Junior | Higher | Variable (upside after senior paid) | Locked until senior fully paid |
How It Works
- Asset Onboarding - Managers register and create funds with defined tranche structures
- Capital Formation - Investors deposit to Senior or Junior tranches during fundraising
- Active Management - Fund operates, generating returns from underlying RWAs
- Yield Distribution - Returns flow through waterfall: Management → Senior → Junior
- Resolution - Fund matures, tranches paid out in priority order